Social Media Marketing April 22nd, 2013
In a bid to boost ad sales, Facebook announced on April 9 that it will enhance its user profiles with offline shopper information from three of the largest US data aggregators – Acxiom, Datalogix and Epsilon. The move will add purchase histories to each Facebook user’s profile, which will allow marketers to target based on actual behavior instead of relying on “likes.” Both Facebook and its customers believe this will making Facebook marketing budgets more effective.
With the addition of offline data, Facebook can offer more precise targeting. If previously an upscale yoga apparel store could request Facebook to show its ads to single women 21 – 45 who live on the Upper West Side of Manhattan and like yoga, the enhanced offline data might allow for more precise targeting. Now, a marketer could ask for single women who like yoga, earn over $200,000, and buy more than $1000 per year from fitness apparel catalogues. The catalogue purchase history and income would come from the purchase history and other data overlays available from the three data brokers. Facebook refers to its enhanced data capability as “Partner Categories” and is offering it for over 500 types of products ranging from consumer package goods to cars. ( http://www.facebook-studio.com/news/item/partner-categories-a-new-self-serve-targeting-feature ).
Acxiom, Datalogix and Epsilon collect data from a broad range of sources, including grocery loyalty programs, catalogue purchases, publicly available government records, self-reported interests, and web surfing based on the use of ‘cookies.’ All three companies already maintain extensive databases with nearly all US consumers in them, which can further refine searches with race, gender, marital status, financial status and presence of children. The advertiser can also supply information in its own internal databases, including email addresses, to improve matches and allow for a better understanding of what ideal customers look like.
One potential risk with an enhanced customer profile program using data collected offline, or outside of Facebook itself is the possible objections of customers concerned with the further erosion of privacy. Both Facebook and the three data brokers are quick to point out that these practices have been in use in the direct mail world for decades, and that the data itself is aggregated and delivered using ‘hashing’ to anonymize individual records. In other words, advertisers won’t be able to look up individual Facebook users by 2012 income. Additionally, Facebook is quick to point out that while addresses are part of the records of both brokers and Facebook, sensitive data like real-time location isn’t part of the offering, despite the growing use of mobile devices to access Facebook. Of course, both the data brokers and Facebook offer an array of privacy controls and ‘opt-out’ procedures.
Advocates of improved targeting point out that this should decrease the number of irrelevant ads Facebook users are exposed to, which both users and marketers should welcome. As a website development CEO explained, why wouldn’t you want ads that show you something you might need?